Benefits brokers will face some significant challenges in 2024. Employer health insurance costs are expected to jump 6.4% after years of steady increases, he KFF reports. This is the result of rising hospital labor costs, which spread first to insurance companies and then to employers. Meanwhile, a recent Federal Reserve study found that fewer Americans can afford a $400 emergency expense.
It is a tool that benefits brokers use to not only help employers choose the right benefits for their employees, but also to ensure that employees have access to those benefits when they need them. This means that you may be faced with the difficult task of helping people find programs and programs. The ultimate goal is to enable employees to choose and access benefits that promote optimal health, engagement, and productivity.
Given this reality, the most successful benefits brokers will be those who think like human capital managers. Let’s see what that means.
What does human capital management include?
In addition to handling core benefits advisory work that balances technology, compliance, and logistics, human capital managers also think from a strategic perspective. Which benefits help employers attract and retain workers? How can brokers create benefits packages that help employees optimize their physical and mental health and workplace performance? Is not it?
And how do national, regional, and hyperlocal (workplace-specific) trends impact the answers to these questions?
This is beyond the benefits a broker would expect to know on its own. Employee feedback is essential to creating and adapting benefits packages that deliver the best possible results. For example, a benefits broker may note national reports on rising health care costs and add questions about paying for health care costs to employee surveys.
Employees may express dissatisfaction with rising pharmacy costs, higher deductibles, or higher costs for mental health care. From there, benefits brokers can determine how to alleviate those complaints. New plan offerings? Are there better educational resources to help employees take advantage of existing services? Additional payment support benefits?
But benefits brokers who adopt a human capital manager mindset need to think not only about how they can support their employees, but also how they can empower them.
Employee Empowerment: Benefits + Information + Access
What does empowering employees look like from the perspective of benefits brokers and human capital managers? The simplest way is to make the right benefits available and choose the right benefits. providing employees with the information they need to do so, and ensuring that they can access those benefits if they need them.
This isn’t necessarily new. The important thing for benefits advisors today to realize is that accessibility is changing. For example, prices continue to rise due to inflation, and healthcare is no exception. Meanwhile, the Fed has reported that it doesn’t expect wages to keep up with inflation until the second half of next year.
This means that benefit options that worked for last year’s workforce population may be less available this year simply for cost reasons.
Benefits brokers can help by offering benefits that allow employees to pay for care in a more cost-effective manner. Health savings accounts and flexible spending accounts are great options to encourage your employer to offer. The new entrants to the benefits space, or health care payment accounts, are employers.
It’s a funding tool that allows employees to pay for treatment with a card and then repay it over time without interest or fees.
One of the big reasons why HPA’s are an important addition to the payment product mix is that HPA’s make funds available to employees from day one, whereas FSA’s and HSA’s allow employees to use funds they have already secured or You can only use funds provided by your employer. Contribute.
We are seeing evidence that a growing percentage of employees are finding value in the HPA model. According to our latest usage data, the user group that grew the most in the most recent quarter was those with an annual income of $75,000 or more. Additionally, the average cost of care for which an employee used his HPA as a funding source decreased from $132 in the first quarter of 2023 to $118 in the second quarter of 2023.
Ensuring employees have access to care when they need it can be especially impactful right now. Some people sought care that they had put off at the beginning of the pandemic, but there is still some demand. For those who have changed jobs or had their benefits changed during that time, removing barriers to care is essential to foster re-engagement with health and health care. This is also necessary for early prevention, detection and treatment of chronic diseases, which can otherwise become serious and costly problems.
Looking to the future: The future role of price transparency
I talked about the importance of human capital managers addressing national trends. I confess that I’ve recently seen one such trend: a variety of initiatives built on publicly available price transparency data that allow employees to proactively purchase care based on cost. I was hoping that digital tools would come along.
Payer disclosures of health care prices over the past year have brought us closer to that reality, but we are not there yet. Why not? There is now so much data available that we must first overcome the challenge of processing it all.
According to one industry leader, “Most payer pricing files are too large on their own to open on a computer.” This means that if you want to build a price comparison tool for your customers based on aggregated data, go through a third-party intermediary that can process all this data updated monthly and provide you with reasonable access to it. It’s more likely that you will need to.
But that process is ongoing. Benefits brokers who think like human capital managers need to be proactive in the price transparency field, as tools built on price transparency data provide an incredibly powerful way for employees to manage costs on the front end. will pay close attention to trends. This will be a very powerful development.
Final thoughts for benefits brokers ready to embrace the role of human capital manager: Whether or not your employees feel comfortable disclosing financial hardship, know that many employees may be experiencing hardship. Accessibility and affordability are challenges, and are likely to continue as health care costs continue to rise, according to multiple data sources.
Making it easier for employees to access the care they need for themselves and their families is one of the most powerful things benefits brokers can do to improve retention, productivity, and engagement. .
